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ddd [48]
3 years ago
11

Approximately how much interest will Karen owe on her credit card next month if the balance she carried over from the previous m

onth was $2,450 and her annual interest rate is 18 percent?
Business
1 answer:
lord [1]3 years ago
4 0

Answer:

Karen will owe an interest amount of=$36.75

Explanation:

<em>Step 1: Determine the total amount after a month </em>

The total amount compounded annually can be expressed as;

A=P(1+R/n)^(nt)

where;

A=total amount

P=principal amount

r=annual interest rate

n=number of periods the interest is compounded annually

t=number of years

In our case;

A=unknown

P=$2,450

r=18%=18/100=0.18

n=12

t=1/12

replacing;

A=2,450(1+0.18/12)^(12×1/12)

A=2,450(1+0.18/12)^1

A=2,450(1.015)

A=$2,486.75

<em>Step 2: Determine the interest amount after a month </em>

Interest amount=total amount-principal amount

where;

total amount=$2,486.75

principal amount=$2,450

replacing;

Interest amount=2,486.75-2,450=$36.75

The interest amount=$36.75

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